The obsessive fixations of Mario Monti
Dear Monti, it's mixing different things that doesn't add up: resentment, on the one hand; the legitimate concerns of a political nature, on the other. Gianfranco Polillo's analysis
Mario Monti's editorial from the pages of Il Corriere deserves a malicious comment. Like some elliptical statements, in truth, to which the former Prime Minister, as well as Senator for life, has abandoned himself. De minimis. But on the need to reach the ratification of the Mes , no objections.
The basic problem is not that of not "putting your fingers in Europe's eyes", but that you still have one more tool for prompt intervention in the unfortunate, but unfortunately probable, hypothesis of a new crisis. A kind of life insurance. Instrument as imperfect as you like, but capable, in any case, of guaranteeing loans at subsidized rates, with respect to market dynamics. And funding not subject to the typical restrictions of an economy on the verge of default.
Consider the latest decisions of the ECB . Taken in tow by the US Fed. According to an old rule, never codified, but always respected. As had happened in the early 1980s, when the then President, Paul Volcker, decided that the time had come to put an end to the inflation of the 70s. It was a thread. Among the first to comply in Europe, the Bundesbank, then Via XX Settembre and then, to follow, all the other central banks. A shining example, even then, of "limited sovereignty".
What is most worrying today is not so much the 50 basis point rise in interest rates which, unlike then, remain negative in real terms. The concerns are related to the ECB's decisions to sell the bonds accumulated, in the season of quantitative easing, for an amount equal to 15 billion a month. That is to say for 180 billion a year, which for Italy is equivalent to 25 billion. For which the Treasury, every year, in addition to the normal needs, will have to find additional lenders willing to subscribe to that additional quota.
Therefore, rather than wondering about possible relations with the EU, the first issue should be: what to do to reduce an otherwise worrying drain? Aiming, as it is assumed, on autarkic titles, particularly favorable from a fiscal point of view, but reserved only for residents? And with what systemic consequences? Other than throwing it into politics, as Mario Monti does. The major questions concern future strategies. Which is not mentioned. That's not the only weakness of that intervention.
At least two things that did not convince. Which then are attributable to a single topic. The controversy against Mario Draghi, held responsible for two distinct and opposing episodes. The financial crunch, resulting from the famous letter signed with Trichet, which marked the end of the Berlusconi government. Hence the excessive prodigality of his management as President of the ECB. “That world” – writes the Senator for life – responsible for the “excesses of restriction…. imposed around 2010-2012 and which had deepened the recession” only to then think that “they could permanently flood financial markets and economies with virtually unlimited liquidity and zero or negative interest rates.” In the presumption of being able to then "confer the qualification of "good" to significant portions of the public deficit and debt."
Today, in the changed national and international context, this is the unexplained thesis, we must "return to the Statute". To the old courtly rules of financial stability. To that old liberalism that never considered John Maynard Keynes a member of the family. The academic solitude of Federico Caffè. While not sharing it, this approach, within limits, can also be there. It's the mixing of different things that doesn't add up: resentment, on the one hand; the legitimate concerns of a political nature, on the other. Which, in turn, reveals a lack of generosity, which does not help to understand the real extent of what is at stake.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/le-ossessive-fissazioni-di-mario-monti/ on Mon, 19 Dec 2022 08:36:52 +0000.